Out of community of property, with accrual

  • With out of community of property with accrual, a starting value is chosen for each party’s estate on the date of marriage. This value is everything the parties own before marriage which they wish to exclude from the accrual after marriage.
  • An advantage is that each party has their own separate estate throughout the marriage and neither party is liable for the other party’s debts incurred. With proper financial planning, this approach will not lead to both parties’ assets being at risk if one of the party’s estate is sequestrated. Parties do not require each other’s consent to buy assets or incur debts.
  • What is the Accrual
  • It is the growth of the estates during the marriage. The accrual of each estate will be calculated on the date the marriage comes to an end (either my death or divorce). The value each estate started with, will be subtracted from the final values of each of the estates.
  • The estate that shows the least growth, is entitled to half of the difference in growth between the 2 estates. If one party’s estate grew more during the marriage, the other party is compensated when the marriage ends.
  • This marital regime is the closest to ‘in community of property’ as can get as the parties share in the accrual, but it is also ‘out of community of property’ as they enjoy the protection in the case of the other party’s sequestration
  • Example:
Seperate_estates_before-marriage
  • Assume the parties decided to exclude the assets mentioned above from the accrual. (Each party has a choice as to which of the assets owned on the date of marriage, they wish to exclude from the accrual)

  • It is important to note that nothing is required to be excluded from the prospective marriage, the parties may start their marriage with a R0.00 value if they wish, everything they own will then form part of their accrual.

    On Dissolution of Marriage:

    Assume the accrual of Mrs X’s estate as at date of the dissolution of the marriage is R500 000 (total growth throughout the marriage) and the accrual of Mr X’s estate as at date of dissolution of the marriage is R300 000 (total growth throughout the marriage).

accrual
  • For each party to receive their equal share of R400 000:

    Mrs X R500 000 – R100 000 = R400 000

    Mr X  R300 000 + R100 000 = R400 000

    Mr X’s estate will have an accrual claim of R100 000 against Mrs X’s estate

     

    Mr and Mrs X will be entitled to the following respectively:

accrual_calculation
accrual_calculation

If this is the option you want to choose, fill in our online application form or contact us for more details